Industry calls for decarbonisation focus

15 May 2013

Europe faces a "lost decade" of low carbon development, the continent's electricity industry association has warned, due to signals that detract from the ultimate goals of energy policy.

The association of European electricity generators, Eurelectric, believes it is possible to set up a carbon-neutral electricity system by 2050, but delaying serious action on this beyond 2030 brings extra costs.

"Indecision today locks in higher prices tomorrow," said a report by the body this week entitled Power Choices Reloaded. Eurelectric argued for "clear policy signals to power sector investors" to replace the "weak and uncoordinated policies" that have proliferated in the EU.

At the core of the problem is the lack of a strong decarbonisation target for 2030 - something which is under discussion now - while the principal policy instrument to achieve this needs to be be the Emissions Trading System (ETS), said Eurelectric. The body complained that other specific European directives on renewables and energy efficiency had so far undermined the simplicity and harmony of the multinational ETS approach.

In the mix

Across the EU's 27 member states, over 50% of electricity is currently sourced from fossil fuels, with nuclear power the largest low-carbon contributor at 27%. All renewables including large hydro make up about 20%. In 2009 the average carbon intensity of EU electricity production was 375 gCO2/kWh.

The result has been a "regulatory jungle" of unstable national policies for low-carbon power through which investors found "it is almost impossible to identify a clear path." It concluded, "The case for investment and research in the power sector depends crucially on the strength of the carbon signal that European policy is giving to the economy as a whole."

Having set the goal and price signals as a drive towards it, Eurelectric said European leaders must complete the internal energy market for the EU, implement appropriate smart grids and electrification of transport and "ensure that all low-carbon technologies are available, including renewables, nuclear power and carbon capture and storage."